Australian shares steady ahead of financial services report; NZ falls

Sept 27 (Reuters) - Australian shares treaded water on Thursday as materials stocks fell on lower copper prices and banks drifted sideways ahead of an interim report due on Friday from a powerful inquiry into the financial services sector.

The Royal Commission, as the powerful inquiry is called, has already revealed widespread wrongdoing in Australian financial services, making it the worst-performing ASX sector this year.

The inquiry questioned on Wednesday whether the insurance industry’s system of self-regulation should be overhauled amid evidence of widespread misconduct.

Kyle Rodda, market analyst at IG Markets, said the falls in banks and insurance stocks were being driven by speculation around the Royal Commission report.

Index heavyweight Australia and New Zealand Banking Group Ltd fell as much 0.5 percent to its lowest since July 3, while National Australia Bank Ltd dipped 0.2 percent.

Across the Tasman Sea, shares of consumer staples and utilities sent New Zealand’s benchmark S&P/NZX 50 index 0.5 percent or 50.04 points to 9,299.81, its lowest in more than a week.

A2 Milk Company Ltd fell as much as 2.5 percent to a more than two-week low and was the biggest drag on the benchmark, while Meridian Energy Ltd fell 3.2 percent to its lowest since Sept. 12.

Earlier in the day, New Zealand’s central bank kept its cash rate steady at a record low on Thursday and said the direction of the next change was still in the balance, citing tepid inflation and a turbulent international outlook. (Reporting by Aditya Soni in Bengaluru; editing by Eric Meijer)